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CUSTOMER SATISFACTION WITH SUPERMARKET RETAIL SHOPPING

Article · October 2011

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 CUSTOMER SATISFACTION WITH SUPERMARKET RETAIL SHOPPING

Binta Abubakar
Swinburne University of Technology

Felix Mavondo
Clayton Campus

Val Clulow
Swinburne University of Technology

Abstract

We investigated the customer ratings of importance of several attributes associated with

supermarket shopping. We then reviewed the satisfaction ratings of the attributes. The aim
was to rank the factors and to relate the importance rankings to customer satisfaction. The
findings have implications in that a retailer is able to assess how well they meet their
customers’ needs on important attributes. The results suggested that since retail formats have
become very standardised, corporate reputation is rated high and may be a source of
sustainable competitive advantage. Accessibility was considered important, as was quality of
service especially the friendliness and efficiency of checkout personnel. The results suggested
the retail chain has largely been able to align its efforts to the areas considered important by
customers. However, the satisfaction scores are rather low suggesting the retailer might be
susceptible to an attack by a competitor prepared to deliver superior value to the customers.

Introduction

Supermarket shopping is often categorised as a self-service retail environment. For

supermarket retailers wanting to build relationships with their customers, being able to track
their levels of ‘satisfaction’ with the key elements of the supermarket environment is
extremely important. From the retailer’s perspective the aim is to minimise the reasons for
complaints and dissatisfaction and the cost of a service recovery plan (McCollough, Berry and
Yadav, 2000) whilst establishing a track of direct feedback from customers about their
reactions to those key elements.

Satisfaction is a consumer’s post-purchase evaluation of the overall service experience. It is

an affective reaction (Menon and Dubé, 2000) in which the consumer’s needs, desires and
expectations during the course of the service experience have been met or exceeded
(Lovelock, 2001). Satisfaction in this sense, could mean that a supermarket has just barely met
the customer’s expectations, not exceeded nor disappointed those expectations. The benefits
of taking the customer’s response beyond satisfaction at this level by exceeding expectations,
is a competitive strategy many retailers aspire to achieve.

Customer satisfaction now represents a central strategic focus for customer-oriented firms
across diverse industries (Szymanski and Henard, 2001). In recent years, researchers have
focused their attention on measuring levels of customer satisfaction (Tse and Wilton, 1988;
Myers, 1991; Peterson and Wilson, 1992; Tom and Lacey, 1995; Hackl, Scharitzer and Zuba,
2000) and on the cues that signal services quality to customers (Carman, 1990; Parasuraman
et al. 1988, 1991, 1994). There has also been an attempt to better understand the dynamics of
the relationship that exists between satisfaction and service quality and the impact on
customer purchase intentions (Bolton and Drew, 1991; Cronin and Taylor, 1992; and Taylor
and Baker, 1994).

Australian supermarkets and grocery stores contributed AUD$38.3 billion and 26% of total
retail sales to June 1999 (IBIS, 1999) The supermarket sector of the retail industry is highly
competitive and stores operate in a mature market with slow growth opportunities and vie
fiercely for market share. Any factor which might influence profit in such conditions is critical
(Anderson and Mittal, 2000). Customer satisfaction has become a primary point of
differentiation in a market where consumers typically make a weekly trip to their preferred
supermarket and spend more on this trip than at other times (Kahn and McAlister, 1997).

Against this background of fierce competition in a mature Australian marketplace, a study

was designed to investigate customers’ satisfaction levels with a range of key elements, which
contribute to the retail offer presented by ane Australian supermarket chain. Factors of
particular interest in a retail supermarket environment are ambience, friendliness of staff,
specialised foods on offer, merchandise variety, prices, check out procedure and accessibility.

Background Literature

In an early conceptual article, Kotler, (1973) develops a systematic exposition of

“atmosphere” as a buying influence. Kotler explores the notion that one of the most
significant features of the total product is the place where it is bought or consumed. “The
atmosphere of the place is more influential than the product itself in the purchase decision"
Kotler, (1973, p. 48). The term atmospherics is defined in Kotler, (1973) as the effort to
design buying environments to produce specific emotional effects in the buyer that enhance
his/her purchase probability. Atmosphere is experienced through the senses, primarily sight,
sound, scent, and touch. Bitner used the term servicescapes to describe the idea of
“atmospherics” in a service setting. Servicescapes also adds the notion of the service
personnel to physical setting (Bitner, 1992). Bitner elaborates on the neglect of the
servicescape as follows: “The effect of the atmospherics, or physical design and décor
elements, on customers and workers is recognised by managers and mentioned in virtually all
marketing, retailing, and organisational behaviour texts. Yet, particularly in marketing, there
is a surprising lack of empirical research or theoretically based frameworks addressing the
role of physical surroundings in consumption settings. The servicescape is describe as
covering such elements as physical layout of the service facility, ambience, background music
and that the servicescape can also affect customer’s impressions of and satisfaction with
service” (Lovelock, Patterson and Walker, 2001). Service quality or desired expectations are
defined as a blend of what the customer believes can be and should be (Zeithaml and Bitner
1996). Service quality can be measured by the level of discrepancy between consumer
expectations or desire and their perceptions of what they received as described by the
SERQUAL scale (Bebko 2000). Customer satisfaction occurs when the value and customer
service provided through a retailing experience meet or exceed consumer expectations. If the
expectations of value and customer service are not met, the consumer will be dissatisfied.
Unfortunately for retailers, most consumers do not complain when dissatisfied, they just shop
elsewhere (Jackson, 1999). Retailers should always keep in mind that customer expectations
move continuously upward and that only satisfied customers are likely to remain loyal in the
long run.
 Methodology

The research was conduct for an Australian supermarket chain. A survey method was utilised
to determine key variables that create customer satisfaction. The effective sample was 800.
This was a response rate of 75 %. All questions were on a 10-point Likert-type scale ranging
from 1=totally dissatisfied to 10=totally satisfied. The questionnaire was 3 pages long.
Exploratory Factor Analysis was used to reduce the number of questions into a manageable
set. The resulting factors were checked for meaning and reliabilities were calculated. All the
scales had reliabilities above .75, which exceeds the recommended level of .7 (Nunnally
1978). The respondents were asked to rate the importance of each item and then to rate how
satisfied they were with that particular item as provided by the retailer. Data was collected
from four postcodes in which the retailer was the dominant retail player.

Results and Discussion

The figures in brackets are the rankings of the importance attached by consumers to various
items. The most important factors are store reputation for ethical business practices, food
handling and environment. This was followed closely by accessibility (parking) and then
customer service and product range and depth. A comparison of the postcodes indicated there
were differences in what was considered important but the pattern of rankings was
maintained.
 Figure 1: Importance of Measures of Satisfaction by postcodes
A B C D F-ratio Different sets
N=175 N=250 N=125 N=250
Store reputation (food handling,
8.76 8.73 9.36 15.185***
safety hygiene) (2) 9.39 B & D>A&C
Store reputation (animal welfare, B, A &C>D
8.41 8.43 8.31 2.308*
free range eggs etc) (3) 8.62
Store reputation (ethical business
8.82 8.77 8.98 1.030
practices) (1) 8.97
Quality of fruits and vegetables 6.23 6.43 6.27 6.22 1.172
Quality of meat products (11) 6.38 6.50 6.39 6.24 1.543
Range of products (7) 6.49 6.73 6.30 6.32 3.744** B>D
Service quality (6) 6.59 6.83 6.57 1.072
6.73
Product availability (9) 6.44 6.60 6.24 6.31 2.339
Reputation (10) 6.42 6.74 6.70 6.51 2.011
Pricing (13) 6.25 6.52 6.27 6.14 3.778** B>D
Parking facilities (5) 6.77 6.88 6.73 6.58 1.681
Enjoyment of shopping
6.45 6.67 6.37 1.208
experience (8) 6.56
Overall cleanliness and hygiene of
6.82 6.63 6.54 1.894
store (4) 6.81
*p<.05, **p<.01; ***p<.001

The results for satisfaction indicate that customers are most satisfied with reputation quality of
service and accessibility. However, since these figure are based on a 10-point scale, there is a
lot of room for improvement since these figures suggest barely satisfying customers. An
important observation, however, is that the retailer seems to meet the needs of the customers
in those areas the customers consider important. There are differences across the postal
districts but these are not many. Postal Code area B seems to have the most satisfied
customers.
 Figure 2: Mean Satisfaction Measures for Different Postcodes
A B C D F Different
N=175 N=250 N=125 N=250 sets
Store reputation (food handling,
8.09 7.88 7.94 3.416*
safety & hygiene) (2) 8.23 B>D
Store reputation (animal welfare, free A, B&C>D
8.25 8.06 7.68 6.315***
range eggs etc) (1) 8.05
Store reputation (ethical business
7.68 7.32 7.58 7.567***
practices (3) 7.91 B>C & D
Quality of fruits and vegetables (13) 6.23 6.27 6.22 1.172
6.43
Quality of meat products (11) 6.38 6.50 6.39 6.24 1.543
B>D
Range of products (7) 6.49 6.30 6.32 3.744**
6.73
Service quality (6) 6.59 6.83 6.57 1.072
6.73
Product availability (9) 6.44 6.24 6.31 2.339
6.60
Reputation (10) 6.42 6.74 6.70 6.51 2.011
Pricing (12) 6.25 6.52 6.27 6.14 3.778** B>D
Parking facilities (5) 6.77 6.88 6.73 6.58 1.681
Enjoyment of shopping experience (8) 6.45 6.56 6.67 6.37 1.208
Overall cleanliness and hygiene of
6.82 6.63 6.54 1.894
store (4) 6.81
*p<.05, **p<.01; ***p<.001

Conclusion

These findings point to several implications for managers. Reputation is important whether it
is for quality, for cleanliness or for freshness of produce. People care about reputation as a
differentiator since most retailing is otherwise very similar. Access to the retail is important.
This might refer to availability of parking and the associated costs. Some factors indicated as
not important are possibly taken for granted. Businesses need to go beyond satisfaction to
attract and retain customers. Customers have become very demanding; hence the low scores
on most satisfaction measures. Large self-service retail chains cannot ignore the importance
placed by customers on the attribute of service quality. Customers value friendliness and
caring treatment and to succeed there is need to provide these especially in competitive
market. The results suggest customer service, might be an important antecedent to customer
loyalty and future patronage. In addition to gaining feedback on attributes of customer
satisfaction further work needs to be undertaken in the retail industry to better understand the
relationship between the store preference, perceived satisfaction and service quality. The retail
outlets chosen were representative of the retail landscape of Australia, the sample sizes were
large, and the measurements exhibited high reliability, and hence the results could be
generalisable.
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